Providence Budget Could be Off Tens of Millions

Millions of dollars in tax rebates for contested property reevaluation values could have a major impact on the $678 million fiscal year 2015 budget introduced last week introduced by Providence Mayor Angel Taveras.

"The level of requests for abatements from the most recent city [real estate] reevaluation -- we're hearing that's around $30 million from the tax assessor's offices," said Providence City Councilman Luis Aponte. "The applications are pending, but the city should have put into their budget the anticipation that they'll need to make reimbursements, and they're not reflected."

The Providence 2014-2015 budget as proposed by Mayor Taveras would see a spending increase of roughly 2.4 percent, with the city government's budget going up $8.6 million, and school spending increasing by $7.8 million -- and no increases in commercial or residential taxes.

As for a potential fallout from the pending rebates, City Internal Auditor Mathew Clarkin said it could have an impact on the budget -- "it all depends".

Budget Process Underway

"I requested a week and a half ago a report regarding the status of the appeals of assessments," said Clarkin. "I don't know the number for certain, but should within the next week or so. Right now, I don't know anything. I've asked what's happened with the appeals so far. So it's a little premature, they're trying to get all the information."

Clarkin noted he was also seeking input on "tangible increases."

"I talked with the assistant assessor, and they said they've found additional values,. That, too, might be premature," said Clarkin. "The administration is coming in Monday night for Ways and Means."

Aponte spoke to the reevaluation process, which had been once every ten years before the General Assembly required municipalities to do so every 3 years in 2003.

"It's been a strange 3 reevaluations, since the last ones were in the housing crisis, and the data was fluid because properties could sell for far below their value," said Aponte, noting the city now had a new firm. "The process allows for appeals. You can go to the vendor, and if they deny you, you can go to the tax assessor. If that's denied, there's the board of tax assessment review."

Aponte said that there was also the chance that the appeals might not be addressed during this administration. "There's the possibility that they could just run the clock on these, and let them be dealt with later," said Aponte.

Sasse on City Finances

Former Rhode Island Director of Administration Gary Sasse thought that in light of the current variables, the budget -- and process -- were in sound shape.

'There has been a significant improvement in the City's budget practices since the Corrective Action Plan to Restore Financial Management was submitted to the City Council and Mayor," said Sasse. "Budgets are being built on more realistic assumptions, there is a meaningful five year financial forecast, monthly budget and cash reports are timely and accurate, a rainy fund exists and reserve accounts are transparent. This was made possible more effective monitoring and financial oversight by the City's leadership. Our recommendations have generally been addressed. In my opinion the City's budget practices are sound."